Funding to payments startups has exploded in the last 5 years. Investors are pumping money into companies building new mobile-payment apps, small-business payment systems, and money-transfer services, among other things. At the current run-rate, funding to payments startups is projected to reach $3.8B in 2015, a new record year for funding to the industry.
This report includes detailed information on:
- Investment Deals And Dollars
- Financing Trends By Stage
- The Top VCs In Payments
- The Most Well-Funded Startups In Payments
Deals and dollars
In 2015 year-to-date through 11/20/15, funding to private payments companies has already reached over $3.3B, up 37% year-over-year compared to full-year 2014, while deals completed rose 5% over the 2014 total. In the 6-year period shown below, that represents an impressive 648% jump in funding since the $445M raised in full-year 2010.
At the current run-rate, this year’s funding is on track to reach more than $3.7B, and deal count would hit 260 deals.
Deal activity nearly quadrupled, from 63 deals completed in 2010, to 235 deals completed in 2015 YTD.
Quarterly trends in payments funding
Two of the last 4 quarters have reached over $1B in funding to payments startups. The high-water mark for for quarterly funding was reached in Q3’15, when financings were buoyed by the $680M corporate minority deal to One97 Communications as well as a big round to Alibaba’s financial services arm Ant Financial Services Group, which raised a $400M Series A.
Deal activity for payments is up on a quarterly basis as well. Eight out of the last 9 quarters have had 50 or more deals completed, with record quarters in Q4’14 and Q2’15 at 68 deals. To put this in more perspective, in 2010 there wasn’t a single quarter that surpassed 20 deals.
Deal and dollar share
In 2015 YTD, 76% of deal share went to early-stage deals. Since 2010, early-stage deals have accounted for the majority of deal share, with that share peaking at 83% in 2013.
Mid-stage deal share has followed a relatively steady 6-year trend, ranging from 12% to 19%. Lastly, late-stage deal share dropped from 13% in 2010, to 5% in 2013, and stands at 7% in 2015 YTD.
Dollar share was varied in the six years analyzed below. In 2015 YTD, early-stage payments startups (Seed/Series A) commanded 61% of dollar share. Mid-stage dollar share received the second-highest share of dollars in 2015 YTD, at 25%.
Late-stage dollar share accounted for 14% of investment, and has been trending downwards since 2013, as seen below.
500 Startups and Andreessen Horowitz tied for the number one spot as the most active investors in payments startups. Plug and Play Ventures took the number three spot, while SV Angel and Accel Partners tied for the number 4 spot.
|3||Plug and Play Ventures|
|9||American Express Ventures|
|9||Webb Investment Network|
500 Startups was also the most active early-stage investor in payments startups. Plug and Play Ventures took the number 2 spot and SV Angel rounded out the top 3 most active early-stage investors in payments startups.
|2||Plug and Play Ventures|
Most well-funded startups
The top 10 most well-funded payments startups have all raised over $150M in total funding to date. One97 Communications has raised over $1.2B in funding, more than triple the amount raised by Alibaba’s financial services arm, Ant Financial Services, which holds the number two spot. See the top 10 list below.
|Rank||Company||Total Funding ($M)|
|1||One97 Communications||$ 1,265|
|2||Ant Financial Services Group||$ 400|
|10||Powa Technologies||$ 177|
Want more information on payments companies? Check out our venture capital database below.